BBC PESTEL Analysis

Introduction

The British Broadcasting Company (as it was originally named) was established in 1922 and started its national broadcast coverage throughout the UK by 1925
without any political influence. The organisation was named as British Broadcasting Corporation in 1927, when it was granted its first Royal Charter. The
organisation earned its reputation of “honesty and accuracy in the news broadcast” during World War II. The BBC is a public funded organisation
which is funded by a license fee charged by all UK house holds, the 1970s was a golden era for the organisation due to a high number of sales of television
sets. The 1990s was the year of technologically advancements for the BBC with the launch of its digital services such as ‘BBC news online’
which was one of the leading websites across Europe (The BBC story 2009).

Political

The BBC is an independent and self-regulated organisation. The organisation’s public sector responsibilities, functions and financial operations are
stated by a Royal Charter. The Royal Charter is reviewed by the respective governments every 10 years. However, governments have used the ‘review of
Royal Charter’ as a process of application of control over the broadcasted content; in particular the news and current affairs. As a result of which,
the Thatcher government proposed an absolute privatization of the BBC in 1986. This proposal was inspired by the regime of “liberalization, market
competition and media convergence” (Harris and Prosser 2007, p.292). However, in the 1990s it was ruled out in favor of independent producers
contributing towards 25% of the broadcasted output. On the other hand, John Major’s government supported the BBC’s retention of public funding
for the organization’s entrance into the competitive market (Harris and Prosser 2007).

Economic

By the mid 1980s, British market saw a shift in market and economic trends. The organisational structures were changing from ‘centralised’ to
‘decentralised’ in favour of mitigating the bureaucracy that was normally exercised in the organisations in those days. The reformation of
organisational structure was now seen as radical to economic management, and was dominantly dictating the public sector. In order to save the organisation,
the response was phenomenal. The BBC decided to inherent an organisational cultural change with an aim of responding to environmental, political and
regulatory shifts of the times. Decentralisation of the BBC was identified to be the pivotal factor for its survival, where cultural change was central
towards achieving a decentralised structure (Harris and Prosser, 2007).

Socio-Cultural

Political gains were targeted towards the BBC that doubted the continuation of public funds. Decentralisation of the organisation was then considered as an
immense significance to reduce the bureaucracy. The British public was aware of the highly bureaucratic organisational structure and analysts had their
doubts that the public funds could be discontinued upon which the organisation is mainly dependent. Post-bureaucratic organisation also meant the BBC will
prove itself to be the eligible recipient of public funds (Harris and Prosser, 2007). The BBC had always maintained its reputation as an honest news
broadcaster with a significant number of viewership. (See SWOT analysis)

Technological

The mid 1980s saw a radical shift in technology. Internet then was dominantly an American defense technology that was designed for the purpose of
communicating messages if a nuclear weapon or an atomic bomb went off. At this point of given time i.e. mid 1990s, John Brit was the Director General of
BBC who took an initiative of taking BBC online, though it was a little too late to grasp the implications of technology as he said. The BBC was a highly
bureaucratic organisation, therefore there was a fight for resources. Brit was also the key person who provided the leadership to bring in the cultural
change. In order to broadcast the BBC’s digital services, the resources have to be put in to technology, where as the producers and managers would
support the investments made in TV and Radio programs at that time. Along with airing its digital services, the organisation also went under other business
technologies such as Business Process Reengineering (BPR) for reducing the cost of doing business to support the agenda of decentralisation of the
organisation and capitalising on the allocated resources (Connor, 2007 BBC internet blog).

Environmental

The technological, political and regulatory changes that influenced the cultural change in the organisation were followed by “globalisation of
infotainment industries”. This means growing dependence of businesses on alliances and “flexible form of digital production” (Harris and
Prosser 2007, p. 293). Under Brit’s leadership, the environmental influences were managed through earning the bid for programme funding. This
decision liberated the TV producers and more job accountabilities were formed. The environmental changes implied the concepts of
‘marketisation’ or creating an internal market and a new trading system. An internal market was formed by reducing subsidiaries, reconstruction
of organisational structure, decentralisation of the structure and so forth. The new trading system was formed by programs bidding for the resources for
the production by offering competent and agreed strategies and practicing managerial controls on programme commissioning.

Legal

The organisation is self-regulated and independent of political or government influence. Nonetheless, due to the deregulatory environment that surfaced in
the mid 1980s, the BBC needed to adjust its internal environment / culture to meet the market shift.